Tutorial4BusinessLaw - Tutorial 4 Business Law Outline...

Tutorial 4 Business Law Outline Answers TEAM A Q1. Issue concerns the duties of a dir, whether a person (you) would have sufficiently discharge your duties as a dir. of Birdbrain by merely signing documents sent by post? Dir own a no. of duties towards the co. laid down by the CO Companies Ordinance and C.L. (Common law) for example CO    CL  Dirs are agents of the company; owe fiduciary duties towards their principal, the company.  In Secretary of State for trade and Industry v Baker, Parker J states ‘Dir have both collectively and individually a continuing duty to acquire and maintain a sufficient knowledge and understanding of the nature of the company’s business to enable them properly to discharge their duties as directors. In Dorchester Finance Co Ltd v Stebbing (1989) UK, a money lending company had 3 dirs, S, P and H . S worked full time for the company, while P & H paid very little attention to the co. and rarely visited its premises. P and H signed blank checks at S’s request with which S made loans which were recoverable. No board meetings were held. It was held S, P and H were negligent and liable to make good the co’s losses. In our situation unlikely merely signing document would sufficiently discharge the duties of a dir. towards Birdbrain Ltd, might be liable for breach of duty of care and skill, also negligence in discharge of duties as a dir. Dirs that are found to have acted in breach are liable to the company, company can seek damages. Q2 Issue regarding duties of dir towards co. as above. CO-s162 CO provides if a director is in anyway directly or indirectly interested in a contract or proposed contract, the dirs are required to declare the nature of their interest at the earliest practicable moment in the next dir’s meeting. CL

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